In economics, the term "labor" refers to workers. As a factor of
production, labor earns wages for the services that it renders. As
such, students of labor economics have traditionally set out to
understand wage formation, the level of employment, and all elements
that go into the making of a wage relationship. Over the years, the
social and economic contexts in which labor markets operate have become
increasingly complex; nowadays, labor economics is no longer limited to
the study of wages. Modern labor economics instead seeks to understand
the complex workings of the labor market by studying the dynamics
between employers, employees, and their wage-, price-, and profit-making
incentives. In other words, modern labor economics explores the
outcomes of the labor market under the assumption that workers strive to
maximize their wellbeing and firms strive to maximize profits. It also
analyzes the behavior of employers and employees and studies their
responses to changes in government policies and/or in the demographic
composition of the labor force. In order to study how labor markets
work, we must first build a good theory of the labor market with
empirical implications that can be tested with real world data. This
course is accordingly designed to teach both fact and theory. By
looking at facts through data and empirical findings, we can better
understand the mechanisms of the labor market. The theory, on the other
hand, will help us in understanding how this data is generated. Prior to
taking this course, you should have completed ECON101: Principles of
Microeconomics or, at a minimum, have a basic understanding of the
topics covered in microeconomics—namely, the demand and supply model and
the concept of elasticity. The purpose of this course is to teach you
how workers and firms make decisions in the labor market. The course
will also teach you how the government can alter the economic
opportunities available to both workers and firms by changing the "rules
of the game" through social policies, thus influencing the decisions of
these two players. At the end of the course, you should be able to use
the tools learned in this course to understand, analyze, and predict
some of labor market outcomes and examine the different ways social
policy can affect the interaction between workers and firms.

Requirements for completion: In order to successfully complete this
course, you will need to work through each unit and its assigned
material. Please note that this course is designed to teach theory and
the application of it and as such, it includes a lot of examples and
assessments along with the reading material. In order to ensure a
thorough understanding of each topic, it is imperative that you complete
all the assessments after you go through the study material.

Note that you will be officially graded only for the final exam. In
order to "pass" the course, you will have to attain a minimum of 70% on
the final exam. Your score on the final exam will be tabulated as soon
as you complete it. You will have the opportunity to retake the exam if
you do not pass it.

Time Commitment: This course should take you approximately 92 hours
to complete. A time advisory is presented under each subunit to guide
you on the amount of time that you may need for that subunit. The
running time for the video lectures is also listed, along with the time
required for assessments and/or assignments (if any). Please do not
rush through the material to adhere to the time advisory. The time
advisory is provided so that you can look at the time suggested in order
to plan out your week for study and make your schedule accordingly. For
example, Unit 1 should take you about 7 hours to complete. Perhaps you
can sit down with your calendar and decide to complete subunits 1.1 and
1.2 (a total of 3 hours) on Monday night, subunit 1.3 (a total of 2.5
hours) on Tuesday night, and subunit 1.4 (a total of 1.5 hours) on
Wednesday night, and so forth.

Tips/Suggestions: As you read, it would be helpful if you
simultaneously try to recreate the graphs on a separate sheet of paper
and learn the mechanics of how the graphs change. Practice the graphs
on your own (and often) before moving on to the next topic. Also make
sure to mark down any concepts or definitions that stand out to you.
Preparing personal notes can be useful as a "cheat sheet" for review
prior to taking the final exam.

The theoretical concepts presented in this course are pretty simple and
logical, and what makes this course extremely interesting is its
connection to the real world. Although it is important to learn the
theory behind every topic, it is more important to understand the
techniques of labor market analysis and important economic and policy
issues dealing with labor and labor markets. To this end, it is
important that you thoroughly understand the examples and the facts that
are connected to every topic.

Apart from reading the material presented in this course, students of
labor economicsare encouraged to form a regular habit of reading news
articles that are relevant to the issues covered in this course. Good
sources are The Wall Street Journal, The New York Times, The
Economist, and Business Week. Other important resources are the U.S.
Bureau of Labor Statistics website or a labor
and economics blog
maintained at UC Berkeley.

Table of Contents: You can find the course's units at the links below.